Question

North Point Ltd was incorporated on 1 June 2015 and five (5) subscribers undertook to purchase 10,000 $1 ordinary shares each in the company and paid for the shares on 1 June 2015.

b)      $2,500 was paid to the solicitors for the formation of the company on

2 June 2015.

c)         The directors resolved to issue 500,000 ordinary share payable 50% upon application. Applicants applied for 600,000 shares and 50% each share. The unsuccessful shareholders were refunded on

10 June 2015.

d)         The directors made a call of 50 cent for ordinary shares on

1 October 2015 and all call money was received except 10,000 shares.

e)       On 1 November 2015 the directors issued 1000 each of 10% Preference shares at $100 each. The applicants paid full amount for the shares and the shares were allotted on 10 November 2015.

f)         On 1 December 2015, the directors decided to raise $500,000 by issuing 5,000 each of 8% debentures maturing in 10 years. The debentures were fully subscribed and allotted by 10 December 2015.                                                                                                            8% debentures maturing in 10 years. The debentures were fully subscribed and allotted by 10 December 12.

In this task you are required to:

Record the above transactions in the appropriate journals.

(Posting to the ledger is not required.)

Answer 1

Date	Accounts	Debit	Credit
06-01-15	Cash	50000
	Common Stock		50000
	(ordinaery Shares issued to 5 subscribers at par $1 10000 to each)
06-02-15	Formation Expenses	2500
	Cash		2500
	(Formation Exps. paid to soliciters)
06-10-15	Cash	300000
	Ordinary Share Applicant		300000
	(50 % application money received on 600000 share application)
06-10-15	Ordinary Shares Applicant A/c	250000
	Common Stock		250000
	(500000 Ordinary Shares Alloted)
06-10-15	Ordinary Share Application	50000
	Cash		50000
	(Money refunded on 100000 shares applications)
10-01-2015	Cash A/c	245000
	Calls is Arrears on common stock	5000
	Common Stock		250000
	(Final Call Amount received except on 10000 share)
11-01-2015	Cash	100000
	Pr. Share Applicant		100000
	(money received for 1000 $ 100 pr shares)
11-10-2015	Pr. Share Applicant	100000
	Pr. Share Capital		100000
	(1000 Pr. Shares Alloted)
12-01-15	Cash	500000
	Debenture Applicant		500000
	(Money received on 8% 5000 10 year each debenture)
12-10-15	Debenture Applicant	500000
	8% $5000 10 Year Debenture		500000
	(Debenture Alloted)